India’s national interest non-negotiable in US trade talks, say government sources

NEW DELHI: With about two weeks remaining before the critical July 9 deadline, India and the United States face mounting challenges in finalising their Bilateral Trade Agreement (BTA) as the 90-day tariff pause period draws to a close. Government sources emphasised that India’s national interests will remain paramount in ongoing negotiations, even as both nations work intensively to reach an interim deal before the deadline expires.

The negotiations have hit significant roadblocks, with the US maintaining its demands for substantially reduced duties on American agricultural and dairy products, along with market access for genetically modified (GMO) crops. India, however, has firmly rejected these proposals, citing concerns over food security, environmental protection, and the welfare of its domestic farming sector.

“India is unwilling to compromise on GMO crops or provide broad-based access for US agricultural and dairy products,” a senior government source said, speaking on the condition of anonymity. “Our position remains clear that any agreement must serve India’s strategic and economic interests first.”

The American side has been particularly insistent on securing lower tariffs for its agricultural exports, viewing India’s vast consumer market as crucial for its farming sector. However, Indian negotiators have expressed concerns that unrestricted access could undermine local farmers and food security frameworks.

Despite these fundamental disagreements, both sides remain committed to achieving a breakthrough before the July 9 cutoff. The current tariff pause, implemented 90 days ago, has provided breathing room for negotiations while preventing an escalation of trade tensions.

If no agreement is reached by the deadline, tariffs will automatically revert to the levels that existed on April 2, potentially reigniting trade friction between the two nations. However, government sources suggest that even in such a scenario, India would maintain a relative advantage compared to other competing manufacturing economies.

The potential return to higher tariffs underscores the delicate balance both nations must strike between protecting domestic interests and fostering bilateral economic cooperation. For India, the negotiations represent a critical test of its ability to engage with major trading partners while safeguarding key sectors of its economy.

Trade experts suggest that failure to reach an agreement could have broader implications for Indo-US relations, particularly as both countries seek to strengthen economic ties amid shifting global trade dynamics.

The coming days will prove crucial as negotiators from both sides work round-the-clock to bridge their differences and avoid a return to the pre-negotiation tariff regime. Government sources remain cautiously optimistic about finding a middle ground that respects India’s red lines while addressing legitimate US trade concerns.

As the deadline approaches, all eyes will be on whether diplomatic pragmatism can overcome the current impasse in what has become one of the most closely watched trade negotiations of the year. (ANI)